US trade relations have improved substantially after years of instability due to geopolitical tensions and the effects of the coronavirus pandemic.
Exports continued rebounding for the US, surpassing the record high last seen in 2014. The US exported goods and services to a record 39 countries in 2022 with the most goods going to Canada, Mexico, China, Japan, and the United Kingdom, according to USA Facts.
In 2022, the US imported $4 trillion in goods and services and exported $3 trillion. The country’s biggest trading partners were Mexico, China, and Canada.
The $4 trillion in imports marked the highest amount on record for the US, with $3.3 trillion of imports coming from goods. According to USA Facts, the US imported goods from every country in 2022, including sanctioned countries like Russia, Afghanistan, and North Korea.
The most commonly imported goods to the US were crude oil, semiconductors, cars, and pharmaceutical preparations, according to the latest US Census Bureau data. The most popular imported services included transportation, travel, insurance services, and intellectual property use.
US-China trade flows
US and China trade relations have been crucial for both economies.
The US-China trade war that began in 2018 during the Trump administration had a devastating impact on American farmers. And by the end of the first year of the trade war, US real income declined by $1.4 billion per month, according to the Council on Foreign Relations. This stemmed from tit-for-tat tariffs between the two nations in response to allegations from the US government of intellectual property theft.
“The original trade war started under Trump because America was getting ripped off by the steadily increasing trade deficit that cost American workers their jobs,” FWDBONDS Chief Economist Chris Rupkey wrote in a recent note. “There’s been no substantive change in policy under Biden — maybe a good thing for market volatility — and Trump’s so-called Phase One Agreement announced in December 2019 to great fanfare and signed in January 2020 right before the pandemic is still front and center on the US trade representative’s website.”
According to the US-China Business Council, state economies rely just as much on doing business with China.
California and Texas export the most goods to China, with exports worth $18 billion and $22 billion, respectively.
California’s goods exports to China include industrial machinery, navigational and measuring instruments, semiconductors and components, basic chemicals, and pharmaceuticals and medicines. Texas’s top goods exports include oil and gas, basic chemicals, resins and synthetic fibers, miscellaneous crops, and semiconductors and components.
On the services side, Illinois exports the most to China at $6.6 billion. The top services it exported include education, air freight and port services, royalties from industrial processes, miscellaneous financial services, and miscellaneous freight and port services.
“The trade ties between the US and China have built up steadily since China became a member of the WTO in December 2001,” Rupkey said. “The current trade flows are so large that neither country can decouple from the other without suffering severe economic consequences. It took over two decades for trade flows to build to this enormous level, and it would take just as long to unwind it without causing damage.”
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Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at [email protected].
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